Restoration Contractor Scams: Storm Chaser Red Flags

Storm chaser scams usually start with a stranger at your door after a storm or flood, offering fast cleanup for cash or a big deposit. The best defense is to slow down, check that the company is local, licensed and insured, and never sign over your insurance money or a blank contract.

Most restoration companies are honest. But disasters draw people who aren't. Here is what consumer and insurance regulators say to watch for, and what to do if something feels wrong.

How storm chaser and restoration scams work

The FTC says that after a weather event, unlicensed contractors and scammers will "call, email, text, or knock on your door" (FTC ↗). TDI warns that "out-of-town scam artists may be the first to arrive at your front door after a disaster" (TDI ↗).

Michigan's insurance department, in a 2026 release with the National Insurance Crime Bureau (NICB), says the work in these scams may never be finished, may use poor materials or workmanship, or may leave victims badly overcharged (Michigan DIFS ↗).

Red flags

Door-to-door offers after a storm

FEMA lists door-to-door solicitation as a contractor scam warning sign (FEMA ↗). The FTC says scammers often knock because they are "in the area" or have materials "left over from a previous job" (FTC ↗). FEMA's short version: "if you didn't request it, reject it" (FEMA ↗).

Out-of-state plates and no local address

FEMA flags contractors who are "out of state, no permanent place of business, no insurance" and recommends someone known in the community (FEMA ↗). The Texas Attorney General says to be cautious of door-to-door contractors who are unfamiliar or from out of town, and to write down the salesperson's license plate number (Texas AG ↗).

Large upfront payments, cash, or payment apps

• The FTC says anyone who insists you pay by cash, gift card, wire transfer, payment app or cryptocurrency is a scammer (FTC ↗).
• FEMA warns about contractors who ask for large payments up front to buy materials (FEMA ↗).
• In Texas, TDI says it's against the law after a disaster for out-of-town contractors to ask for a down payment before they start (TDI ↗).
• Triple-I describes a common scheme: a "contractor" insists on a large deposit, starts the job, and disappears (Triple-I ↗).

Pressure to sign right now

Michigan DIFS and NICB list "rushing homeowners into signing a contract" as a top warning sign, along with claiming to work for "the government" or for certain insurers "all the time" (Michigan DIFS ↗). FEMA adds high-pressure sales, scare tactics, and bids that are extremely low (FEMA ↗).

Paperwork traps

TDI lists several tricks (TDI ↗):

• Calling a contract an "estimate" or "release" just to get a signature.
• Contracts with blank spaces that can be filled in later with higher costs.
• Language like "Homeowner agrees to the listed repairs for the value of insurance proceeds," which hands the contractor every dollar of your claim.

The Texas Attorney General also says not to sign a check from your insurance company over to a contractor (Texas AG ↗).

Offers to "cover" your deductible

TDI says it's against the law in Texas for a contractor to offer to waive your deductible or work it into a bid (TDI ↗). Florida DFS says a contractor cannot waive your deductible or offer it as a rebate (Florida DFS ↗).

Inflated or made-up damage

Padding a claim is insurance fraud, and you can get pulled into it. Florida DFS lists "inflating the cost of a damaged item" as fraud, and warns you can be unknowingly involved when someone files for "more damage than exists" on your behalf (Florida DFS ↗). DFS also says a contractor who takes an insurance payment and abandons the job or uses subpar materials is committing insurance fraud. Ask to see every line of any estimate sent to your insurer, and don't sign anything you know is wrong.

Assignment of benefits: what changed in Florida

An assignment of benefits (AOB) transfers your insurance claim rights to someone else. Florida DFS explains that an AOB gives the third party authority to file a claim, make repair decisions and collect insurance payments without your involvement, and that restoration companies commonly used them for water claims (Florida DFS ↗).

Florida reformed this in two steps:

• 2019 rules: For policies issued from July 1, 2019 through December 31, 2022, an AOB must include a written, itemized estimate and a bold warning, and you can cancel it within 14 days of signing, among other protections (Fla. Stat. 627.7152 ↗).
• 2022 reform: Under subsection (13) of the same statute, you may not assign post-loss benefits under a residential or commercial property policy issued on or after January 1, 2023. Any attempt to do so is "void, invalid, and unenforceable."

Florida DFS says you do not need to sign an AOB to get your claim processed or your home repaired (Florida DFS ↗). Outside Florida, AOB rules vary. If a company asks you to sign anything that gives it rights to your claim, ask your state insurance department or an attorney first.

The 3-day cancellation rule has limits

The FTC's Cooling-Off Rule usually gives you three business days to cancel a sale made at your home. But it does not cover sales "needed to meet an emergency," or repairs you asked the seller to come to your home to do (FTC ↗). So an emergency water job you called for may not come with a federal right to cancel. Some states have their own rules. Read before you sign.

How to verify a restoration company

1. Confirm the license with your state or county (FTC ↗). See our state pages for Texas, Florida and New York.
2. Ask for ID, proof of insurance and references (FTC ↗).
3. Check the address. Is there a real local office? TDI says bids should be on letterhead with a phone number and address (TDI ↗).
4. Call your insurer before you hire, as Michigan DIFS and NICB advise, so you understand your coverage (Michigan DIFS ↗).
5. Get it in writing, with no blanks, and pay by credit card after the work is done if you can (FTC ↗).

This is why every Best Restoration listing shows where a company is based and its license status where state data is available. A company that says it's local but is based three states away is worth a second look. For a full hiring checklist, see how to choose a restoration company.

How to report contractor fraud

• FTC: ReportFraud.ftc.gov ↗ (FTC ↗).
• Your state attorney general or local consumer protection office (FTC ↗). In Texas, the Attorney General's hotline is 800-621-0508 (TDI ↗).
• Local police and FEMA's Disaster Fraud Hotline after a declared disaster (FEMA ↗).
• Your insurer, your state insurance department, or NICB at 1-800-TEL-NICB (Michigan DIFS ↗). In Florida, DFS takes fraud reports at 1-800-378-0445 (Florida DFS ↗).

If you've already paid or signed, keep copies of everything, write down names and plate numbers, and talk to an attorney or your state insurance department about your options.

If you'd rather start with companies whose location and license status you can see, Get matched with restoration companies near you.

Frequently asked questions

Are all storm chasers scammers?

No. Some traveling crews do honest work. But FEMA recommends a local contractor known in the community and treats out-of-state companies with no permanent place of business as a warning sign (FEMA ↗).

How much of a deposit is too much?

There's no single national rule. The FTC says don't pay the full amount up front and notes some states cap down payments (FTC ↗). In Texas, out-of-town contractors can't ask for a down payment before starting after a disaster (TDI ↗).

Is it legal for a contractor to pay my deductible?

Not in Texas or Florida, according to TDI ↗ and Florida DFS ↗. Check your own state's rules.

Can I still sign an assignment of benefits in Florida?

Not for residential or commercial property policies issued on or after January 1, 2023. Those assignments are void under Fla. Stat. 627.7152(13) ↗.

What if a contractor says they work for my insurance company or FEMA?

Be careful. Michigan DIFS and NICB list this as a warning sign (Michigan DIFS ↗), and FEMA says it does not license or certify contractors (FEMA ↗). Call your insurer directly.